**CHRISTOPHER LOTZ**

Co-Founder & CEO of Goodcover, a company building a refreshingly fair approach to Home, Condo and Renters Insurance where coverage is clear and certain.

What Is Goodcover? Tell Us About What You Do And What Your Mission Is.

Goodcover is an insurance provider that operates as a cooperative. Our mission is to build a community of members enjoying financial peace of mind at half the cost of legacy providers. What differentiates Goodcover from others is that after collecting premiums and paying claims, at the end of the year, leftover money is returned to the membership via a dividend. This model aligns our incentives with members so we’re never betting against them.

We’re live in California with our first product, renters insurance, and expanding across the nation this year.

What Is Your Background? What Led You To Starting Your Own Company, And How Did You End Up In This Space.

There's a joke in the industry that nobody chooses to go into insurance; insurance chooses you. And it’s kind of true - it's not really a much-loved industry. No little kid dreams of going into insurance. My father worked in the space so I knew about the business, so it wasn't totally foreign to me.

When I got out of college we entered the financial crisis. I got connected with AIG around my knowledge of boats, and they took me on to teach me the insurance part. They would send me abroad to go work in a foreign country - which is what I wanted after college. I learned a lot, and from the inside, you begin to understand how insurance underpins the entire economy. The point of insurance is to pick people off their feet. That’s very valuable and I really liked that. Of course, you then find that everyone universally hates which means it needs some serious work, so I stuck with it.

What Have Been Both Your Favorite And Least-liked Parts Of Your Entrepreneurial Journey? What Have Been Your Most Challenging And Most Exciting Moments For You And The Company?

There’s the insurance part and there’s also the start-up life part.

On the insurance part, I learned early on about how important and how valuable it is, but also how broken it is. So it’s been enjoyable to see it work and help people get back up on their feet with our product. But it’s also been hard - one of the least enjoyable parts is dealing with the enormous amount of headwind in this industry to change anything. It’s hard, but it’s getting done.

One the entrepreneurial journey itself, I loved doing Y-Combinator, which was super fun and helpful.

There is a mood meter chart on the whiteboard in our office from before we launched, tracking how we were feeling about all the partnerships and regulation milestones we had to overcome. It would go up and then crater because we would be having a setback, and then it would finally go up and up and up to what we called the party line where we got the deal done. We haven’t erased it, it’s still on that whiteboard. So the least and most favorite parts of the journey are literally on that chart.

And of course COVID-19 pandemic was a lowlight, navigating a young company during this time brought new challenges we didn’t foresee -- including staying focused with our children at home (my co-founder and I each have 3 kids under 5 years old). Succeeding from that and feeling that we launched the product and had done it well, and people were using it and it was helping people and we were doing it the right way. That was probably the biggest highlight - even if it was going from zero to one.

And now as we build and grow, there are lots of challenges and fun parts along the way. You hear this a lot from entrepreneurs - they look back on their early days with nostalgia.

What Was The Fundraising Process Like For You? Tell Us About Your Investors And What You Use The Money You’ve Raised For.

We launched in February of 2020, we started growing really fast like we were hoping - through COVID times, so we’re chugging away. We got to the point where we realized we had solved or answered most of the questions we had set out to answer with the launch - will people use this, will they buy it, can we sell it successfully, can we service it successfully - can we get all these things working and does it work for their investment. We thought very much yes.

There were a lot of people to talk to. We did YC, we did a seed round. Warm intros to about 40-60 people on our list of who we were looking to raise from to close our Series A. We ended up selecting Goodwater which is a consumer-focused fund was a great fit for us because at the end of the day we’re a consumer business.

We did a lot of looking at fintech and insurtech VC’s but ultimately, we are a business that has a relationship with our members, a consumer business. They really understood our business and we understood the value they bring and that clicked really well. That happened in October 2020 and since then we have used that money primarily to hire more engineers, expand our marketing budget, but the biggest thing is for scale - we’re going to go from one state (California) to 50% of the population over the next 12 months or so. It’s to take what we’ve already done and bring it to a wider population.

What Was The Inspiration Behind The Company Name?

The inspiration behind the company name - funny story, we had a different company name when we entered YC and we couldn't get the URL. We spent forever talking about this because we wanted something that gives a collaborative, cooperative feel without sounding like we’re a dairy co-op and confusing people. We couldn’t get the URL because it was taken and then we were like “now what.” Dan began perusing the Internet and found Goodcover and was able to get it for a screaming deal - and it was an amazing URL.

I learned a lot from that - first thing, get the dot com. Very important. Sometimes you can over-optimize that stuff and the name kind of finds you. And Goodcover perfectly describes what we do.

Tell Us About Your Co-Founder. How Do His Skills Supplement Yours?

My Co-Founder is Dan Di Spaltro - he’s behind the technology we build. I have given him an associate’s degree in insurance as he likes to say. I don’t think I’ve learned as much about technology as he has about insurance but oh well. But we complement each other perfectly in that regard. If this is the insurtech business, I am the insur, and he is the tech. It helps that we like each other, too. We respect each other’s spheres and collaborate in that regard.

Over The Last Few Years, Numerous Insurtech Startups Have Popped Up Aiming To Capture A Share Of The Market And Modernize The Experience. How Does Goodcover Differentiate Itself In The Marketplace?

I think the core difference between us and every other insurtech is that we operate as a cooperative. Fundamentally, we change the incentive at the core of the business from we make money betting against our members, to we make money serving our members. Since we don’t take a profit off of the claims portion of your dollar, we do a flat fee and then return a dividend back to our membership. It changes our relationship with them in a very positive way.

This flows onto all different parts of the business. Ultimately what we’re building is a membership organization and in that regard, it’s about service, it’s about taking care of people. We’re one of the only insurtech I think that still has an easily accessible phone number you can call if you have problems.

Nearly 90% of our members are not switching, they are coming from no insurance at all, so this is new to them and we make people feel comfortable doing that. We are their first relationship. We are less expensive than the legacy market, we offer better coverage, we offer a digital experience - all of those things are table stakes in the insurtech game. What differentiates us from the others is our relationship with our membership.

How Do You Think Your Industry (Or The World In General) Will Change Post-COVID?

Our industry is going through two huge secular shifts. The first is that younger people are growing up and gaining assets - they are getting married, having kids, all these life stages. Many of these life stages have been delayed. 1) because of the financial crisis and 2) because of COVID-19. These continuous crises have put my generation and the generations around me on the back foot, in that regard. I strongly believe that’s not because we want it, but because it happened that way - and we are working our hardest to get back on our feet. When that happens you will see the buyer in the market for insurance - who needs to be served, what needs to be protected, who is at risk and post-COVID that will only accelerate. Older people will be downsizing and younger people will be upsizing as the economy shifts. There will become a tipping point at which the agency distributed model of insurance that dominates today will decline and will collide with the increase in the number of people coming into market that will not want to use that model. And that will be a real challenge for the industry. Helping those people - that’s the reason we’re doing this.

Run Us Through A Typical Day In The Life.

At 5 am I get woken up by my 10-month old. I either put her pacifier back in or try to bring her to mommy for nursing depending how strict we are being with sleep training that day. I try to go back to sleep for a little while. By 6:00 or 6:30 I get woken up by 3 yr old and 4 yr old, jumping on our bed usually or making a racket in another part of the house and wondering what it is. There’s the whole rush process of getting everyone ready for preschool and I’m usually in my seat by 8:00 or 8:30 am depending on how house exit goes. I then try to reserve my mornings as much as possible for what people call Maker Time. We’re still a small company. I’m still the head insurance person so that means spreadsheets, etc. In the afternoon I tend to take meetings with the team, I meet with outside investors and all the various forward-facing, public-facing company stuff. It works because of internal math time at the house or because it’s 4:30 and I have to go pick up the kids from preschool. Then, we have family time, dinner time, the kids are typically in bed between 7:00 and 8:00 pm. Usually a couple of days a week I’ll continue to work afterward, but I also try to have time for me and my wife and everything else that happens in your life.

What Are The Top Three Qualities or Skills You Believe Entrepreneurs Need In Order To Be Successful? Also, What Advice Do You Have For Entrepreneurs Who Are Just Starting Out?

Have a strong conviction about what you want to do. Know what the dream is. Know where you are going. My co-founder and I talk about this a lot. There is Mission Level, Strategy Level and a Tactics Level. Mission Level should never really change - it might, due to life, but in general, it should not. Then at the Strategy Level things often change as you develop. Don’t get wedded to Tactics - just do the right thing for the situation that works in your strategy.

Do what you say you are going to do - that’s a quick way to go from zero to hero in a lot of people’s view.

Willingness to be wrong - you will be wrong a lot. The sooner you realize that, you will learn a lot in the meantime.

Tell Us A Story Of Something That Happened To You, Something You Heard, Or Something You Saw, That Either Made You Laugh Or Taught You An Important Lesson.

Thinking about this question - it’s hard to pin down really one “go to” story that has taught me something especially meaningful. Instead, I can think of a million stories (most of them very boring and none of them funny) that all have the same lesson: you know that pain you get when you realize you missed a deadline, or should call that person, or want to follow up but are embarrassed to? Trust yourself to listen to that feeling - it’s telling you something is wrong here and you can do something about it. If you’re ever wondering what the “right” answer is and more data won’t tell you… that little pain probably will.

If You Can Have A One-Hour Meeting With Someone Famous Who Is Alive, Who Would It Be?

Oprah. I don’t know whether I would learn something about business from her success, about the world outside my privileged experience from her story, or about myself from the questions she’d ask, but I’d learn something important. The way I envision it, it wouldn’t be the kind of meeting you take notes from. Rather, it’d be one of those where years and years later you suddenly realize it was the catalyst for the better you that’s doing whatever it is you are doing now.

What Is Your Favorite Quote And Why Does It Resonate With You?

The Golden Rule - “Do unto others as you would have them do unto you”.

What Does Success Mean To You?

You could easily be trite on this subject, but to me success is very much about doing what you set out to do and feel good about it. For me, that’s to build Goodcover into a leading provider of personal insurance for the next generation in a fair, efficient, and helpful way. To be what insurance should be. If we can do that and build the company into that sort of powerhouse, then we’ve been successful.

There are other parts of life, too - like being successful with your kids is making sure they are happy and learn things and healthy and they feel loved. I have just succeeded with Goodcover and not the kids, then I have failed. It’s the same with my wife and family and friends. It’s an important balance.

For Goodcover, it’s a simple process: we know what we need to be, we know where we need to go, it’s pretty measurable, and we’re on the way. Sometimes people measure success by outcomes and outcomes are important but there is a process to get to the outcomes. You have to stick to the process, adapt the process, measure the process. Jon McNeill formerly of Tesla said you wanna make the year, you gotta make the month. You want to make the month, you have to make the week. If you want to make the week, you have to make the day.

Taking that down and taking it one day at a time is the hard part, and that is when you know you are on the pathway.

Christopher Lotz’s Favorites Stack:

Books:

1. Getting Things Done - David Allen

2. Disciplined Entrepreneurship - Bill Aulet

3. The Great CEO Within - Matt Mochary, Alex MacCaw, Misha Talavera

Health & Fitness:

1. Cardiocast - audio training for rowing and running

2. Overfit - a YC personal training start-up

3. Meditation - I use Headspace

Newsletters & Podcasts:

1. Coverager - insurtech newsletter

2. Scott Galloway’s blog

3. Ray Dalio’s economics newsletter

Christopher Lotz | Goodcover